UPM: Major benefit of Russia’s accession to WTO will be in softened customs procedures

On the pages of corporate Griffin journal, top managers of UPM expressed their outlook on possible results of Russia’s WTO accession for the company. Pekka Rajala, VP, Sourcing Director North Europe, supposes that elimination of export duties will most of all influence wood delivery flows to UPM mills in Eastern Finland. “We constantly lack birch pulpwood, so growth in deliveries will ameliorate the situation with birch pulp production procurement. Birch imports from Russia will also provide raw materials for the plywood mill in Savonlinna”.

After the sale of Pestovo mill, UPM still owns Chudovo plywood mill in Russia. Jouni Toyras responsible for plywood sales thinks that WTO accession will not influence competitive positions of this business seriously. “There is very strong own plywood production in Russia and it is unlikely that we can increase considerably exports of Finnish plywood there. Abolition of duty for our Russian-made plywood will not change the situation either, as our Russian competitors will also take advantage of it,” Toyras said.

Tapio Kolunsarka, SVP, UPM Raflatac Europe, thinks that the most obvious benefit of Russia’s accession to WTO will be in softened customs procedures. “Fast deliveries are essentially important for the label business. If customs formalities become less harsh, we will be able to shorten delivery terms to our customers and will boost competitiveness of this sector”. UPM Raflatac owns terminals in Moscow and St. Petersburg. “In the short-term, this agreement will not bring serious changes, but in terms of the future this is a big step. Russia is one of the most important markets for us. Growth rate was two-digit last year as well as this year,” Kolunsarka concluded.